The UAE’s Supreme Petroleum Council (SPC) has announced the discovery of substantial recoverable unconventional oil resources located onshore, estimated at 22 billion stock tank barrels (STB), and an increase in conventional oil reserves of two billion STB in the Emirate of Abu Dhabi
The announcements were made following the SPC meeting presided over by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the United Arab Emirates (UAE) Armed Forces and Vice-Chairman of the SPC.
At the meeting, the SPC approved ADNOC’s capital expenditure (CAPEX) plan of AED 448bn (US$122bn ) for 2021-2025 to enable smart growth. As part of this plan, ADNOC aims to drive over AED160bn (US$43.6bn) back into the UAE economy between 2021-2025.
In addition, the SPC gave approval for ADNOC to award exploration blocks in Abu Dhabi’s second competitive block bid round which was launched in 2019, and HH Sheikh Mohamed bin Zayed mandated ADNOC to explore potential opportunities in hydrogen with the ambition to position the UAE as a hydrogen leader.
His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Group CEO, said,
“Today’s announcement by the SPC of the discovery of recoverable unconventional oil resources demonstrates how ADNOC is efficiently expediting the exploration and development of Abu Dhabi’s unconventional resources and marks a major milestone as the nation’s unconventional industry evolves. Importantly, the increase in the UAE’s conventional oil reserves sends a strong signal that ADNOC is leaving no stone unturned in unlocking value from our abundant hydrocarbon resources to ensure the UAE remains a long-term and reliable energy provider to the world for decades to come.
“In parallel, we are developing large-scale capital projects in Ruwais to further stretch the margin from each barrel of oil we produce as we deliver on our downstream expansion strategy – at the heart of which are our plans to develop Ruwais into a dynamic, global hub for the UAE’s industrial growth and economic diversification – and we are strengthening our marketing, supply, and trading capabilities to unlock greater value from our products.”
ADNOC’s CAPEX plan will enable it to drive upstream growth, progress downstream expansion and further strengthen the company’s marketing and trading capabilities.
Despite the challenging market conditions, ADNOC delivered AED 62bn ($16.8 billion) in foreign direct investment (FDI) to the UAE this year, taking the total FDI ADNOC has driven since 2016 to AED 237bn (US$64.5bn).
The new discovered resources will further strengthen the UAE’s role as a leading resource holder with high-quality crude grades, reinforce the country’s energy security and underpin its position as an essential and reliable energy provider. This year, ADNOC successfully increased its crude oil production capacity to over four million bpd.
The 22 billion STB of recoverable unconventional oil resources announced by the SPC exceeds some of Abu Dhabi’s major fields in terms of resources and the production potential ranks alongside the most prolific North American shale oil plays. The unconventional oil resource assessment was supported by extensive well data as well as a dedicated appraisal programme by ADNOC in an area covering 25,000 sq km onshore in Abu Dhabi.
The two billion STB of conventional oil reserves announced by the SPC increases the UAE’s conventional oil reserves base to 107bn STB of recoverable oil, strengthening the country’s position in global rankings as the holder of the sixth-largest oil reserves. This increase in reserves is as a result of the ongoing maturation of ADNOC’s developments towards its 5mn bpd oil production capacity target by 2030, and its appraisal activities, particularly in the Al Nouf field.
Both the conventional and unconventional oil resources offer the potential to provide ADNOC with additional amounts of Murban-grade crude.
Following the SPC’s approval for ADNOC to award exploration blocks in the Abu Dhabi 2019 Block Bid Round, the company is set to announce the successful bidders. Based on existing data from detailed petroleum system studies, seismic surveys, exploration and appraisal wells data, estimates suggest the blocks in this second bid round hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas.
Commenting on the new discoveries and budget approval, Tim Armsby, partner, Projects and Finance at Pinsent Masons Middle East, said,
“The announcements are important – Abu Dhabi’s oil fields are well explored, so the addition of new proven conventional reserves is not a common event. Regarding the unconventional reserves, the significance of these would depend on their precise nature as such resources are much more expensive to exploit than conventional oil. Collectively, however, they cement the UAE’s position as one of the leading oil producers globally.
“Of more significance is the approval of the US$122bn budget for the period to 2025. This will give confidence to companies active in this sector which have been subject to severe economic pressure this year (through the combination of low oil prices and COVID-19) and support ADNOC’s ambition to increase production to five million bpd by 2030. It is also understood that a significant part of this budget is aimed at downstream investments aimed at securing a greater share of the oil value chain.”
